Tag: Foreign Sovereign Immunities Act (FSIA)

The 13th-century Dome Reliquary, part of the Welfenschatz or Guelph Treasure, is displayed at the Bode Museum in Berlin

“Any transaction in 1935, where the sellers on the one side were Jews and the buyer on the other side was the Nazi state itself is by definition a void transaction”.

So argues Nicholas O’Donnell, an attorney representing descendants of the Jewish art dealers who sold a collection of medieval artworks known as the “Guelph” or “Welfenschatz” Treasure, allegedly under duress and threat of persecution. The complaint for the two heirs was filed in U.S. District Court in Washington D.C. to recover yesterday afternoon. The objects were part of the treasury of the Braunschweig cathedral and were used to store and display relics. The claimants allege that a group of Jewish art dealers were forced to sell the objects in 1935 to the German state of Prussia.

One unfortuante aspect here is that the German commission charged with resolving the claims of Nazi-era claimants was unable to achieve a satisfactory result for the claimants and the German government. One of the likely issues in this dispute will be one the timelinesss of this suit, whether a court will examine the circumstances surrounding an alleged forced sale nearly 80 years after it took place. The complaint alleges that the objects were sold under persecution for 4.15 million Reichsmarks (RM). If we do some rough back-of-the-envelope calculations, the exchange rate was 2.45 RM for $1. So that means the objects were sold for just shy of $1.7 million in 1935 dollars, which be nearly $28 million today. Considering the treasure may be worth as much as $226m, the German State seems to have received a pretty good bargain. The legal question will be whether that sale was under duress.

The paper of record gets some reactions to the Immunity Clarification Act, which would remedy an inconsistency between the Immunity from Seizure Act and the Foreign Sovereign Immunity Act. I spoke with the reporter a number of weeks ago about the piece. I wrote a lengthy email discussing the law, and summarized recent cases which likely prompted the sponsors of the bill in the house and senate to act. I noted alternatives other nations have successfully used. Some of that made it into the piece, and of course the one part of the piece attributed to me was taken out of context:

Derek Fincham, an assistant professor at South Texas College of Law in Houston who specializes in cultural heritage law, said the exclusion probably also reflected the notion that the bill would be difficult to pass without an exception for Holocaust-era claims.

“To put it bluntly, how many Cambodians donate to political campaigns?” he said. “All of this goes back to political influence on a money level, which is unfortunate.”

The quote only speaks to a small part of my response to the question. I was asked why the thefts from a place like Cambodia might be treated differently in the proposed bill. I gave a number of other reasons for the Holocaust Era exception which runs from 1933-1945. I discussed the unique nature of the holocaust, the scope of the spoliation which occurred, and the Spoliation Advisory Panel in the United Kingdom which also treats the holocaust era in a unique way. I do think that cultural heritage policy, like any political decision, stems from political influence and a constituent group which makes itself known to its representatives, but that’s only one part of the equation.

As I told the reporter last month when we spoke, the new bill arises because of recent cases involving two acts of congress which conflict. The first act, the immunity from seizure act bars suits which have the effect of depriving a museum the custody or control of a work of art, lent by a museum. The other act of Congress, the Foreign Sovereign Immunities Act has been deemed to open a window for claims, even when immunity has been granted under the Immunity from Seizure Act. The two recent cases are Magness v. Russian Federation, and Malewicz v. City of Amsterdam. In both those cases suits for the value of the paintings were allowed to continue, despite the fact that they had been granted federal immunity.

Ultimately the State Department hears a request for immunity and the lender must provide information about the history of the loaned works. The State Department is not thoroughly vetting these requests, and rather than have an exception for this or that period of spoliation, the best solution would be to avoid giving a foreign lender immunity if there is a tainted history to the object.

One of the Nazi-era works at issue in Malewicz, titled Suprematism 18th Construction, by Kazimir Malevich

Legislation which would have an impact on the lending of foreign artworks is currently moving through both the House and the Senate. The Foreign Cultural Exchange Jurisdictional Immunity Clarification Act would remedy an inconsistency between two laws. The first act, the Immunity from Seizure Act bars suits which infringe on the custody or control of a museum while they are loaning the work of art. The other act, the Foreign Sovereign Immunity Act has opened the door for some claims, even when immunity has been granted under the Immunity from Seizure Act.

Two recent cases which highlight this areMagness v. Russian Federation, andMalewicz v. City of Amsterdam. In both those cases suits for the monetary value of the paintings were allowed to continue, despite the fact that they had been granted federal immunity. The proposed law seems to be a sound and reasonable accommodation for the recent conflict between these two statutes. However some have claimed that this would preclude certain claims in Federal Court. This strikes me as troubling because the State Department hears a request for immunity and the parties have to provide detailed information about the history of the loaned works. The implication is that the State Department is not thoroughly vetting these requests, and that when the works arrive in the United States unsuspecting lending museums, who may have been unaware they had a work of art subject to a claim, may be hauled into court, after they were given guarantees that this wouldn’t happen. A grant of immunity is issued by the State Department, which has the responsibility for checking that there is no potential claim to the work of art. I find it curious that many of the same groups expressing anxiety about the clarification (like the LCCHP here in this brief press release) advocate for State Department involvement in US import restrictions via the Cultural Property Advisory Panel. It seems to me that if we entrust the State Department with regulating imposition of import restrictions, why are they unable to research the history of an object entering the US for a temporary loan. And for me that makes bad law and bad policy. Foreign lenders perhaps should give up title to some of these contested objects, but claimants waiting in the wings and springing a lawsuit on a lending museum will lead to fewer art loans, and will end up limiting those temporary exhibitions anyway. What we have is a cultural embargo on works of art which may be the subject of a Nazi-era claim.

Art is a good ambassador, and the exchange of art is an admirable goal. Aggressive repatriation litigation, particularly after a foreign museum has been told it will not be sued in Federal Court, by the State Department, sets a troubling precedent and will certainly restrict number and quality of works of art museum visitors will see in loaned exhibitions. Remedying Holocaust-era wrongs is a worthy goal, but piercing immunity produces uncertainty for museums and current possessors of art. A better system would negotiate and recommend returns or compensation via something like the Spoliation Advisory Panel in the United Kingdom. Most interesting of all, the proposed clarification does not even attempt to remedy potential difficulties with Nazi-era disputes which arose between 1933-1945. Holocaust-era claims gained in number in the 1990’s with a number of important efforts and writers focusing attention on the issue. It is an example that many museum-goers are aware of. We all know the Nazi’s looted art and forced victims into selling or leaving behind their art collections. The legal precedents created in holocaust-era claims also can be applied to other periods of taking like the Bolshevik Revolution and the Cambodian conflict, and in fact we are seeing courts examine the taking of objects during those periods as well. The Holocaust repatriation movement has the benefit of a growing number of advocates who are actively networking with repatriation attorneys, auction houses, and art historians to aggressively pursue claims. However the cost of this litigation is restricted movement of art, and increasing silence on the part of museums in Europe and North America. Holocaust victims should have their rights vindicated, but a courtroom adversarial process is not always the best remedy for past injustices.

David Grann reports for the Chronicle of Education on the Seventh Circuit decision which will make it exceedingly difficult for victims of a 1997 bombing in Jerusalem to secure Persian antiquities to satisfy their default $90 million judgment against Iran. The underlying dispute involved the plaintiffs successful action against Iran for supporting Hamas. Iran did not appear at the civil trial.

Today’s ruling dealt with the more limited question of whether the plaintiffs can use pieces of cultural heritage currently situated in the United States to satisfy the judgment against Iran. As a result you have the unlikely combination of Iran, the Field Museum, the University of Chicago and the Oriental Institute all arguing that these objects are immune from suit.

I was quoted in the story, and as I wrote Grann this afternoon, Museums holding objects from other nations are breathing easier. The long-standing principle in U.S. law is that property of foreign nations is immune from suit in the United States. Courts were given some guidance in 1976 when Congress passed the Foreign Sovereign Immunities Act which outlined the circumstances under which this immunity could be lifted. Yet as the three-judge panel held today, the orders by the Magistrate and the District court both conflicted sharply with the FSIA, as they ordered what the court called a sweeping discovery request. That request would have forced Iran to detail all of its assets in the United States.

The opinion is a big win for Iran and the museums which currently hold the Persian antiquities. The Seventh Circuit—which agreed with a prior holding in 2006 in Rubin v. Islamic Republic of Iran—has said these objects are presumed to be immune, and even if Iran decides not to challenge the attachment, a court even on its own must look for a good exception to the Foreign Sovereign Immunity Act. Courts are going to be very cautious when attaching the property of foreign nations, as that really falls squarely under the foreign policy authority of the Executive Branch.

Other courts have been similarly disposed to claims of domestic plaintiffs seeking attachment of Iranian cultural heritage in the United States. (Rubin v. Islamic Republic of Iran, 456 F. Supp. 2d 228 (D. Mass. 2006). Hamas claimed responsibility for the bombing in question, and the Rubin plaintiffs brought civil actions against Hamas, and also to Iran for providing material support and finance for the bombing. Experts testified that Iran provided both economic assistance from between $20 and $50 million dollars, and also terrorist training.

Last week Lee Rosenbaum noted the Met’s “Beyond Babylon” show was unable to exhibit 55 planned objects from Syria because of the possibility that victims of terrorism might attempt to seize the objects to satisfy judgments. This is the predicted outflow of the Foreign Sovereign Immunities Act provision and another ongoing dispute over the Persepolis Fortification Tablets, briefly discussed here. A group of plaintiffs has sued Iran for a terrorist bombing which took place in Jerusalem in 1997. Iran did not defend the suit, so the defendants have attempted to satisfy the judgment by using

Judith Weingarten, an archaeologist, has a very good extended discussion of the Met’s difficulty, and a great rundown with links of the ongoing tablets dispute over at IntLawGrrls:

The tablets are not commercial assets like oil wells, tankers, or houses. Instead, these types of culturally unique and important materials fall within a special protected category and are not subject to seizure. This trove of tablets has never been a commercial item to be bought or sold. The tablets have never been a source of profit either to Iran or to the Oriental Institute. They are non-commercial items of cultural heritage, every bit as unique and important as the original document of the Constitution of the United States. (Imagine if a future Iraqi government were to put a lien on that document.) The stakes are enormous. If the lawsuit prevails, this would do irrevocable harm to scholarly cooperation and cultural exchanges throughout the world.

That is already starting to happen. The Syrian government had offered to lend the Met invaluable parts of their cultural heritage: many of these objects that had never left the country before. Of American institutions, only the Met has the resources to pull off such a project, which depends as much on personal contacts as on cash. That little card on the wall doesn’t say it all.

The Met submitted applications for immunity from seizure for all the borrowed foreign works — including pieces from Armenia, Georgia, Greece, Lebanon and Turkey, as well as Syria — but finally decided that the FSIA amendment jeopardized the Syrian loans. Though not on display, the 55 Syrian objects are in the catalog. There you can see how important a role they played in the internationalist narrative conceived by Joan Aruz (right), the curator in charge of the Met’s department of ancient Near Eastern art.

Interesting points. As museums continue to find it harder and harder to acquire new objects, loans are a great substitute which alleviates pressure on the existing regulatory framework. When leases become difficult as well, American courts and lawmakers ought to seriously consider whether the attachment of these antiquities really is the best way to proceed.

There has been increasing attention paid lately to the use of art and antiquities to satisfy unrelated judgments against nations. In 2005, Russia had a $1 billion shipment of 54 paintings from Moscow’s Pushkin Fine Arts Museum seized at the Swiss border to satisfy Russian debts owed to Noga.

Hamas claimed responsibility for the bombing in question, and the Rubin plaintiffs brought civil actions against Hamas, and also to Iran for providing material support and finance for the bombing. Experts testified that Iran provided both economic assistance from between $20 and $50 million dollars, and also terrorist training. Now I’m sure many readers would be quick to point out the US has given similar aid to similar groups, perhaps even during this Sunni awakening in Iraq, in which the US is essentially paying Sunnis to stop attacking coalition forces. I imagine Iran would have had a vigorous potential defense, however a default judgment was entered, whereby Iran essentially ignored the suit. Iran has since changed their stance after the Rubin plaintiffs decided to execute the $90 million judgment by claiming Persian antiquities in museum collections across the country. I’ll defer to Wawrzniak’s analysis as to what has transpired, but this litigation seems destined to last a number of more years.

One one level I can sympathize with plaintiffs who attempt to satisfy their judgments in this way. However, such a strategy, if taken to its logical conclusion would have troubling consequences for the cross-border movement of works of art. This was an issue in the recent dispute over the Royal Academy display of “From Russia: French and Russian Master Paintings 1870-1925 From Moscow and St. Petersburg”. Russia nearly backed out of the deal, eager to avoid a replay of the Portriat of Wally litigation.

The display required an act of Parliament to grant special immunity to prevent the works from being claimed by descendants of the original owners from whom many of the works were summarily seized during the Bolshevik revolution.

The question is, are the cultural benefits Great Britain and Russia share by viewing these masterworks, many never seen in London before? I think there is, and this cross-border movement of art is an important ideal which should be preserved, the recent string of nazi spoliation, and terrorist and other claims are important, and those victims deserve their day in court. However it should not be at the expense of our collective cultural heritage.

Via the invaluable Museum Security Network I saw today that Marilyn Henry of Forward has an interesting overview of the Malevich litigation pending in Federal Court in Washington D.C. It implicates many of the ideas I talk about in my forthcoming article to be published this fall in the Cardozo Arts and Entertainment Law Journal, Why Federal Criminal Penalties for Dealing in Illicit Cultural Property are Ineffective and a Pragmatic Alternative available on SSRN.

Here is an excerpt of Henry’s article:

A lawsuit over ownership of 14 paintings by Russian artist Kazimir Malevich is currently pending in federal court in Washington. The case is complex, but this much seems certain: The court’s ruling will strongly influence whether American courts remain open to claims for Nazi-looted artworks being held by European museums.

A major issue in the Malevich lawsuit is the American government’s grant of immunity from seizure. It is one of two federal measures, one legal and one financial, that promote international cultural exchange.

The government’s goal is certainly commendable, but in the interest of cultural exchange it effectively allows the rights of victims of art theft or expropriation to be overridden. Taken together, the two measures create the bizarre scenario of the American government subsidizing the exhibition of misappropriated or looted art at American museums while barring victims from filing claims in American courts for these artworks.

There is nothing sinister in the measures’ intent, which help museums enormously. The federal legal protection and financial support for international loans enables them to mount shows that are culturally significant and often reap substantial economic benefits for the museum’s home city. The Metropolitan Museum of Art, for instance, said two recent exhibitions — “Cézanne to Picasso: Ambroise Vollard, Patron of the Avant-Garde,” and “Americans in Paris, 1860-1900” — generated $377 million for New York.

Those exhibitions were made possible, in part, by immunity from judicial seizure issued by the State Department, and a federal indemnity that insures artworks and artifacts against loss or damage while in transit and on loan for exhibition in the United States.

The immunity from judicial seizure assures foreign institutions that artworks lent to the United States will be returned. It dates from 1965, when foreign lenders, primarily in the Soviet Union, feared that the objects could be seized as payment for court judgments or held as collateral for commercial debts. That happened in 2005, when officials at the Swiss border briefly impounded masterpieces from the Pushkin Museum as payment against the Russian government’s debt to a Swiss company.

Of course the City of Amsterdam and the Stedelijk Museum don’t want to part with the works because they don’t feel they’ve done anything wrong. I don’t know too much about this case but here’s what I’ve gathered. The Stedelijk Museum was sued in federal court in Washington D.C. by 35 descendants of the Russian artist Kazimir Malevich. At issue are 14 Malevich works.

The Stedelijk Museum probably acquired the works in 1958 from a German architect named Hugo Haring. Some allege Haring didn’t really own the paintings; and the ownership documents he provided to the museum had been forged so he could sell the paintings to the museum.

In 1927 Malevich brought the paintings to Germany for an exhibition, but entrusted them to a group of German artist friends when he was forced to return abruptly to the Soviet Union where he died without being able to reclaim them. The three friends of Malevich who were holding the paintings either died or fled, leaving the works in the control of the architect Haring. He may have hidden the paintings until after the war, when he came in contact with prospective buyers from the Stedelijk Museum.

Malevich’s descendants did not bring claim to the paintings until after the fall of the Soviet Union. They initiated their lawsuit in US federal court in January 2004 when the paintings arrived in the United States for an exhibition. Like Maria Altmann, the Malevich heirs are basing their claim on the Foreign Sovereign Immunities Act (FSIA).

The dispute is ongoing. It’s an interesting case, and the natural consequence of the favorable standing many claimants enjoy in American courts. The drawback of course is it will be more difficult for American museums to loan works of art, especially if claimants wait to publish their claim until the works are on display in the US, and then announce their claim.

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Dr. Derek Fincham

Welcome to the Illicit Cultural Property Blog. I started writing here in 2006 as I was undertaking my PhD research into cultural heritage law at the University of Aberdeen. I work to provide regular updates on thefts, antiquities looting, and legal developments in the field.

I am a Professor at South Texas College of Law Houston where I teach art and cultural heritage law, among other subjects.